A Flu that Shook the World

Chris Doyle

Although we are focused on COVID-19, some researchers have been looking into the economic effect of the 1918 Spanish flu pandemic in order to gage a sense of where we are headed.

Until this day historians continue to debate about the Spanish flu death toll and most agree that this horrifying global pandemic took between 20 and 100 million lives.

Born out of the First World War, the influenza ripped through the trenches, killing millions as it was spread around the world by returning soldiers.

Surprisingly, the Spanish Flu’s effects were greatest among young adults as opposed to the oldest or the youngest.

The pandemic’s effect on the working-aged population increased its economic damage. According to Robert Barro et al. the Spanish Flu pandemic, “reduced real per capita GDP by 6 percent and private consumption 8 percent,” similar to the levels seen during the 2009 Great Recession.

While India, China, and Kenya were amongst the hardest hit, the United States experienced a modest 1.5 percent GDP decline and a 2.1 percent private consumption decline. On top of that, countries with a 2% mortality rate had their stocks plummet 26% as inflation climbed.

Similar to COVID-19, much of the economic chaos from the Spanish Flu was driven by a swift closure of theatres, schools, and other venues to prevent the virus from spreading.

Additionally, masks became popular much like today. However, after several “second waves” the flu mysteriously disappeared. Economically, many countries experienced similar declines in GDP, including the United States, whose economy shrunk by an even greater percentage of 4.3%.

On the other hand, as destructive as COVID-19 pandemic has been, it is unlikely it will reach the devastating level of the Spanish influenza.

Fortunately, this time around, death tolls are 10x lower with a population that is 3 times as large. Still, there are always important lessons to be learned when studying the Spanish Flu’s economic impact and what that may means for us today.

(Wikimedia Foundation, 2021) Chicago Police wearing facemasks.